Economic indicator for NYC; Wine Merchant

Looks like things ARE stabilizing. Your NYT link is at least 6 months old..

http://www.liv-ex.com/pages/static_page.jsp?pageId=100

nice jsmith9005

dead cat bounce
The Liv-ex 100 Fine Wine Index is the industry's leading benchmark. The value of the index as of 31st May 2009 was 214.04, a rise of 0.3% on the previous month. The index is up 4.5% year to date, and down 17.2% year on year. To trade futures on the Liv-ex 100 visit Intrade.

Don't wines/spirits do better than the rest of the economy during a downturn?

The market for wine over $25 is dead in the water. Nothing over that price sells. I won't believe real estate is coming back until that changes.

Everyone in the industry is saying that high end wine is being redirected away from the U.S. market toward Asia.

Are you guys serious?

Jancis Robinson and others have written about high end wine going toward the Asian market. A number of merchants have told me the bulk of their wine sales are now under $25. I've seen written reports as well. Seems a good indicator to follow.

so Napa is hurting?

assume so
http://www.google.com/hostednews/afp/article/ALeqM5hjqZ0FCqk_Ero_VDpfS7UeZBWI7A

RS - I wouldn't exactly call a $30 bottle of wine "hi-end" and to say that "nothing over that price sells" couldn't be more inaccurate.

Just my $.02 and a little reality-check.

RS - I wouldn't exactly call a $30 bottle of wine "hi-end" and to say that "nothing over that price sells" couldn't be more inaccurate.

WRONG!
$25 is just a useful reference point to seperate house wine from the higher end product.

Sorry - is there any evidence proving this is a relevant indictor to real estate, beyond the obvoious connection that they are both in the broad economy? Why is this being discussed on a real estate board?

http://cityhallblog.dallasnews.com/1010_hall_monitor_cartman.jpg

"WRONG!
$25 is just a useful reference point to seperate house wine from the higher end product."

A $25 bottle of wine is nothing special. Anyone who actually drinks wine will agree with this statement. And as for "nothing over that price sells", again, I don't think this is accurate at all. Now, did you mean to say, "sales of wine over $25/bottle is down x%"...okay, that might be accurate. What you said...not so much.

scoots - I agree.

Our view of the wine industry (like ourviews of R/E) are skewed by our living in NY. The vast proportion of wine (90-95% by $) that gets sold in this country goes for $10 or less. The price range of $12-15 or so is called "Super Premium" in the industry. Above that range you are in some pretty rarefied air.

I don't know about sales in NYC, but nationwide sales of Super Premium wine have been dropping and now sales of wine in general are dipping after having continued to rise for a while after the crisis hit.

good point. For the country as a whole $20 wine might be a splurge.

I have seen data lately showing stronger sales for beer and lower quality spirits, such as vodka, gin, whiskey and tequila.

Not to mention the fact that someone who really loves to search out great wines can find them in the sub-$25 category. They just won't be names that will impress your not-so-savvy or your need-a-name-rather-than-a-taste-to-be-impressed type of friends. But they may be better.

There is a LOT of room to find great wines at sub-$20. You just won't find names that will impress.

Not to go off on a tangent, but if you can get over the whole California Cabernet thing, there are some really great wines out there at more reasonable prices. So much oak in some Cali wine..surprised I havent' gotten a splinter yet..

My wife relates the Cali Cabs to "licking a tree".

It was so successful for so long that there is now a market for un-oaked cab's.

Tell your wife she can blame Robert Parker. WhenI splurge its for burgundy & Barolo

I agree, getting a good bottle that is inexpensive is a joy.

If you like white wine that is dry, with a lot of minerals, it can be a challenge to find a good selection of bottles under $20. A good Riesling that is dry can be more $, too. If you like good champagne, you don't have to spend a fortune but you almost have to spend $30-40/bottle (some exceptions, but again it is more enjoyable to drink some variety).

waverly, look for the vernaccia di san gimingano (sp?). it generally goes for 40-50 in the restaurants i go to, so i'd think it would be around $20 if you can find it in a wine store.

i don't like oaky wines, and it can be hard to find decently priced whites that are dry. kind of like AvUWS's comment about un-oaked cabs. Love good red zins, but their quality has been decreasing, at least in terms of their value. For full-bodied reds you can't beat the Argentinian Malbecs, try a good Norton to start and then explore.

If you want a very tasty Red Zin try Rancho Zabaco, its under $25 for the Somona Heritage and about $40-50 for their single vineyard wines from Dry Creek and the Russian River Valley..

For White, try Iona Sauvignon Blanc(South Africa)($15)
Stephen Tanzer
"Pale Silver. Musky aromas of lemon peel, crushed, stone, quinine and wintermint. Juicy, bracing and intense; has tactile texture but remains light and brisk. Finishes with a dusty whiplash of grapefruit rind. Very concentrated, sharply delineated sauvignon. One of the best examples I tasted this year from South Africa."For white wine try Iona (Sauvigon Blanc) South Africa

Do we now have wine sales people promoting their goods on a real estate blog?

"dead cat bounce"

um, ok - we'll see if that's the case in about 6-12 months time - but you were the one who brought up the index in the first place - Just because I highlighted the fact that you posted a old link, and you hadn't looked at the activity since last winter, doesn't change the fact you thought it was a relevant economic indicator.

Do we now have wine sales people promoting their goods on a real estate blog?
NO! But people who have a favorite bottle that want to share. Life is more than talking about some piece of real estate out of your reach.

Carpe Vinum! seize the grape

doesn't change the fact you thought it was a relevant economic indicator.

And I still do. intentionally avoided the newer links...
Doesn't mean I'm predicting flat wine sales forever, but do believe it is a useful indicator of discretionary spending for those earning six figures and above.. and maybe a useful real estate tool by extension.

Ultimate wine tasting video starting at 2:30 The Great Peter Lorre

http://www.youtube.com/watch?v=Jl5Q3EcoqAY&feature=related

http://www.moneyshow.com/investing/global.asp?aid=GlobalPer-17024

http://wineryprofitability.com/2009/04/15/2009-economic-outlook-update-first-quarter/Current Update

The most recent wine economic outlooks have hint of bad news for U.S. wineries. January and February were good months for wine sales, but the current aggregate data for March is not looking so good-mostly due to the drop in sales outside the U.S. Consider the recent headlines from some other great sources:

April 6, 2009: Wine Spectator: Global Drinks Report: Wine Market Stagnates.

April 7, 2009: The Press Democrat: Consumers Flock to Cheaper Wines.

April 3, 2009: Decanter: Constellation Brands to cut 5% of workforce.

Upon seeing the headlines, you would think U.S. wineries are headed for a brick wall. Fortunately, this is not entirely the case. The wine market stagnation article explains that U.S. demand is still growing, but world wine demand has stagnated. As for consumers flocking to cheaper wine, the analyst interviewed in the article tempers his forecast by saying that wineries should resist the temptation to engage in deep discounting (sound familiar?), because there are still a lot of bright spots in the domestic wine market. Finally, the Constellation article explains that weak sales in its Australia, Europe, and United Kingdom markets have a lot to do with the recent cutbacks. At any rate, two thirds of the first quarter that showed very positive results and I think there is enough data out there to be positive on wine sales for the remainder of 2009.
Indicator #4: The strength of the U.S. Dollar

Imports and Exports wax and wane on the strength of the U.S. dollar versus other currencies. Not only do currency trading websites have good data on the money markets around the world, but they have good forecasts to help predict what will happen in the global economy with regard to inflation, deflation, and the balance of trade. One of my favorite sources is Forex News.
Current Update

The dollar had been strengthening in the last few months, but has leveled off. It is still looking like wine imports into the U.S. are going to be very competitive, especially with the wine market stagnating in countries outside the U.S.
Economic Outlook Update: Still Cautiously Optimistic

Sure, some of the most recent economic outlooks have taken a turn for the worse. However, the fundamentals of the previous outlook really haven’t changed that much. While we have seen some buying down and some softening in the wine markets, the basic principals behind wine buying are still holding. So for now, my original economic outlook still stands. The only thing that I would add is that you need to strive to give your customers a reason to be loyal to your brand. New products, new labels, and the experience that your customers have in your tasting rooms will be your keys to success moving forward.

nOT AGAIN!

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6578368.ece

Why is Cabernet more expensive than Pinot Noir?
Hint: Blame 25 year old wall street wannabes

There is no logical reason that Cabernet is nearly 20 percent more expensive than Pinot Noir on average. It should be the opposite.
http://www.thedailybeast.com/blogs-and-stories/2009-07-14/the-great-cabernet-rip-off/full/

Wow. Be careful of those Robert Parker unheard of produers!!!

http://www.drvino.com/2009/07/22/sierra-missed-the-saga-of-sierra-carche-2005/

Jay Stuart Miller
Executive Oenophile

Join Date: Mar 2002
Posts: 912

Default Sierra Carche 2006
Tasted moments ago before the All-Star game.

Any resemblance to the wine I tasted and like a couple of years ago is non-existent. This bottle (sent to me by Robert Kenney) was very close to undrinkable. I hate it when that happens.

I'll be sending a note of inquiry to the importer, Well Oiled Wine Company, who are very reputable people.

MrBigJ
__________________
Jay Stuart Miller

Meanwhile, the Wine Index continues to slowly recover...

"The Liv-ex 100 Fine Wine Index is the industry's leading benchmark. The value of the index as of 30th June 2009 was 214.27, a rise of 0.1% on the previous month. The index is up 4.6% year to date, and down 18.9% year on year."

interesting jsmith...

http://www.liv-ex.com/pages/static_page.jsp?pageId=100

I see it excludes California product which factors out the under 30 Wall Street guys..
Regional weighting (Jan 09)
Bordeaux (Red) 91.33%
Bordeaux (White) 1.04%
Burgundy (Red) 3.49%
Champagne 3.32%
Italy 0.63%
Rhone

0.19%

http://greeninc.blogs.nytimes.com/2009/08/13/french-winemakers-sound-alarm-over-climate-change/

Merde!

Leading figures from the French wine and food industries are urging their government to push for a strong global agreement at a United Nations climate summit in Copenhagen in December, warning that failure to cut greenhouse gases will devastate their sector.

I have been really enjoying culley savignon blanc lately. Also reds from portugal, which are excellent but still low prcied and have a lot of clean fruit flavor. and organic reds are delicious if you never tried them. anyone know any organic wine bars on the UWS or EV?
i love this board.

glamma, if you like whites
it's all about South African Sauvignon Blanc and Vouvray Chenin Blanc

Champagne 3.32%

that one might be a good indicator that things are improving, when people have sth to celebrate.

"The Liv-ex 100 Fine Wine Index is the industry's leading benchmark. The value of the index as of 31st July 2009 was 215.58, a rise of 0.6% on the previous month. The index is up 5.2% year to date, and down 17.9% year on year. "

it remains below year over year between 17%-19% (as from March 2009). the index seems to have strong seasonality, usually rising on june-july-august. it started declining in oct2008 at a rate of 11%, now the decline is closer to 20%. imho people take time to trade down & the recession is hitting a broader base.

btw, amazing run up during 2005-2007!!!

Admin, talk to your local wine guy. They've shifted their product mix toward more lower end under $20 bottles.

glamma, try the argentinian reds also. there are a couple of good wine bars with organic offerings in the EV, but the names escape me (all those names like butter, counter, etc.). next time i'm down there i'll report back, i recall a very good one on first avenue, somewhere around 8th streetish.

An under $20 must have(No intereest in promoting a merchant so you'll need to do a google or winesearcher.com

Descendientes de Jose Palacios - Petalos del Bierzo

From Tanzer(91 Score)
Ruby-red. Vibrant red berry and cherry aromas are underscored by pungent minerality and rose; this smells like a great Chambolle-Musigny. Sweet raspberry and floral pastille flavors are enlivened by brisk acidity and gain sweetness with air. Very suave, focused and strikingly pure wine with superb complexity and poise

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a_NEz6W.zPvE

Aug. 14 (Bloomberg) -- Before Paul Schaye heads for Southampton, he packs a bottle or two of Argentine malbec.

“I’m into flavor and rich color. It’s not over the top in terms of price,” says Schaye, 56, managing director of New York-based Chestnut Hill Partners, which helps private-equity companies find takeover targets. “I love malbec.”

These days, people in the Hamptons, a Long Island retreat for financiers and celebrities, aren’t indulging as they used to in high-priced brands such as Opus One, Schaye says. The Opus One winery sells its 2005 Bordeaux-style blend for $190 a bottle, while Schaye says he pays $18 to $22 for a malbec.

"Admin, talk to your local wine guy. They've shifted their product mix toward more lower end under $20 bottles."

guy? that's discriminatory! i talk to HER... lol

sure, a winery close by offers "recessionary wines" at less than $7/bottle, kudos to them for the idea. i'm actually buying more than i used to as i take advantage of those "savings" (ie, i don't save a penny less, but end the day on a high note more frequently :-)

http://ftalphaville.ft.com/blog/2009/09/02/69556/wine-doing-fine/

Things are looking up in the world of wine.

The industry’s leading benchmark, the Liv-ex 100 Fine Wine Index, rallied 5 per cent in August compared with the same period a month ago, to 225. The index has risen 10 per cent up year to date, but is 14 per cent down year on year.

http://www.wine-economics.org/journal/content/Volume4/number1/abstracts/Hodgson_vol4_1_09_1-9/index.shtml

An analysis of over 4000 wines entered in 13 U.S. wine competitions shows little concordance among the venues in awarding Gold medals. Of the 2,440 wines entered in more than three competitions, 47 percent received Gold medals, but 84 percent of these same wines also received no award in another competition. Thus, many wines that are viewed as extraordinarily good at some competitions are viewed as below average at others. An analysis of the number of Gold medals received in multiple competitions indicates that the probability of winning a Gold medal at one competition is stochastically independent of the probability of receiving a Gold at another competition, indicating that winning a Gold medal is greatly influenced by chance alone. (JEL Classification: D02, Q19)

My wife and I were recently in Bordeaux on a wine expedition and this is the low down.
2005 really great year but look for bargains on the 2008’s that will be out soon. 2008 may as good as 2005 but because of the economy the auction prices were way down.
Saint-Emilion is the greatest off the Bordeaux’s and is in fact 60-80% merlot. Before merlot the base wine was malbec. Cabernet is considered inferior to these wines.
So, all the nonsense about how great the cabs are and don’t drink no fucking merlot is just marketing and ignorant people, although it’s true that the California wineries made some crappy merlot.
Saint Emilion is the only appellation where there is a very well maintained classification system that is annually reviewed. Generally the more words after Saint-Emilion the better. So, Saint-Emilion Grand Cru Classe Premire is the absolute best.
Pommeral and Saint-Emilion are both on the right bank and separated by a 20ft dirt road. So pommerals can be as good but aren’t under the same classification system.
Bottom line is to look for 2005 Bordeaux’s. Most of the wine stores don’t know how good they are and you can find these sometimes around $15-20. If you find one that you like buy a case. You won’t go wrong.

ieb
Great comment. Merlot from Bordeaux is a different product than found else where, but for me it's about Cab Franc. Canon la Gaffeliere is worth seeking out, and because of it's high Cab Franc content slips under the radar when that varietal does well in a non so good year. Check out 2004 which I've seen for $30-$50.

riversider, thanks. It's all good.

BTW I saw an iphone app where you can take a picture of a wine bottle label and you can see a review and also catalog you're own inventory.

Had dinner last night with Doris Duke and her charming husband Rubirosa.
Shake Shack and Thunderbird.
Everyone seemed to have a good time.

saturday's or thursday's vintage?

http://www.decanter.com/news/289291.html?aff=rss

maybe the recession is over?

Chateau Lafite and its second wine, Carruades de Lafite, continue to defy the fine wine market, with prices of both continuing to rise week on week.

Lafite 2008 is currently trading at around £3,800 per case, rising in price by around £90 per week, even though it is not due to bottled until next year.

Crain's did a similar analysis for NYC.

The most expensive suit sold at the big place on union square used to be a $1499 canali. Now its a $599 theory.

I just picked up a suit at Brooks Brothers $2000 marked down to $550. The salesman said they only had two sales like this in the last 20 years....

http://www.liv-ex.com/pages/static_page.jsp?pageId=100

The value of the index as of 31st August 2009 was 225.45, a rise of 4.6% on the previous month. The index is up 10.0% year to date, and down 14.2% year on year.

There's something about Morey
St. Denis

Is this a great appellation or what?

Riversider, was that off the shelf or custom made? Is the sale still on?

No sale.
This happened to be Lignier Michelot Facconieres. But I continue to be impressed by village. I happen to like 2004 which is a little off the beaten path in terms of vintage selection, although it is "less expensive"

Lowery, Anything form 2002, 2004 & 2005 promises to be very rewarding. 2007 is definitely something I am looking forward to as it promises to have "some" similarity to 2004.

After tasting a bottle of 1997 Opus One, I never again spent more than $50 on a bottle of wine. A memory can last a lifetime.

California is very over-rated. Burgundy is totally different.

If I'm dining out and am not familiar with anything on the wine list, I always follow 2 rules - California and least expensive. I'm not ashamed to admit that I recently had a $220 bottle of wine and it was worse than my $10 - $15 house wine, which is generally a red zin. You have to go with what you like. Any thoughts on the recent aerater craze? We've taste tested aerated vs. poured straight several times and can't really tell the difference. However, I generally like decanted reds better than the straight pour. My point is that I don't think the aeraters work.

Wine challenge: pour white wine into one dark container and pour red wine into another dark container Can you tell which is the red and which is the white? You'll need the same color containers and no temperature differential.

East71 there are many grapes and regions. If you have the interest take a wine class. There are many fantastic regions and grapes that are well under $30. Of course not everyone likes the same thing. I just picked up some Mencia from Bierzo that goes for just a bit over $15.00

I like Sauvignon Blanc from Marlborough, New Zealand. Crisp, grapefruity & under $20.

Nice! South Africa has a similar style in the same price range. Check out Iona.

Thanks, will do.

http://www.latimes.com/features/food/la-fo-cultcab4-2010feb04,0,3672344.story

The current economy has created ominous rumblings in the market for Napa Valley wine. Demand for high-end super-premium Cabs, even so-called cult wines, has weakened considerably with the recession. Sales are stagnant, inventories are high, and direct-mail customers -- a vital piece of the high-end model -- are abandoning once-coveted positions on mailing lists, while those who have waited years for the opportunity to buy in are overwhelmed with offers.

Despite the shift in the market, some producers are defiant. "I'm not dropping my price," says Ron Wornick, owner of Seven Stones Winery in St. Helena, "and you can put that in writing." That price is $175 a bottle, to which Wornick feels entitled, comparing his wines to other luxury goods, like fine watches and diamonds. "A hard-to-find, precious, high-end product, whether it's from Ferrari or from a tiny vineyard in Napa, is still fine and precious," he says.

Just discovered mega-purple. why am i not shocked.
http://findarticles.com/p/articles/mi_m3488/is_3_87/ai_n16116989/

What if someone told you there was a substance you could put into a red wine that made the wine darker than you could get naturally, covered pyrazine and masked some elements of brettanomyces, added a textural element that made the wine "sweeter" in the finish and was reliable because it made even mediocre wines taste more uniform. Would you use it?

Apparently, thousands of wine-makers around the world have answered this not-very-theoretical question in the affirmative. In interviews with a dozen winemakers and wine company executives, I learned that such a substance does indeed exist. Sounding much like a magical potion that improves many wines into which it is blended, Mega Purple (and its cousin Ultra Red and other similar products) are thick concentrates derived from Teinturer grapes, and are aimed strictly at filling gaps in red wines that have color deficiencies, a procedure that otherwise might be accomplished by blending in a darker wine.

Se
By Nikolaj Gammeltoft
B
April 13 (Bloomberg) -- For the ultimate in liquid
Co
investments, try top-quality wine, which has outperformed one
Se
benchmark U.S. stock index for 13 years and withstood two
R
recessions.
That’s the conclusion of Philippe Masset and Jean-Philippe
Weisskopf, two Switzerland-based economists who compared wine
prices with the Russell 3000 Index between January 1996 and
January 2009. The researchers studied more than 400,000 prices

Ch
on regularly traded wines from the 13-year period, which covers
two bull markets and two bear markets for stocks, to construct a
general wine index and a gauge of top vintages.
N
“My wine cellars have probably appreciated better than any
other investment I have made personally,” said Drew Nieporent,
Fi
owner of Corton, Nobu and Tribeca Grill in New York. The third
Ar
Al
restaurant holds a 2009 Grand Award from Wine Spectator
magazine. “Great wines are scarce,” he said. “You can’t get
P
them everywhere.” D

http://www.businessweek.com/news/2010-04-13/wine-beats-russell-stocks-as-liquid-investment-in-swiss-study.html

http://www.nytimes.com/2010/05/19/dining/19pour.html?ref=dining

Bordeaux is out Burgundy is in.

Not so long ago, young wine-loving Americans were practically weaned on Bordeaux, just as would-be connoisseurs had been for generations. It was the gateway to all that is wonderful about wine. Now that excitement has gone elsewhere, to Burgundy and the Loire, to Italy and Spain. Bordeaux, some young wine enthusiasts say, is stodgy and unattractive. They see it as an expensive wine for wealthy collectors, investors and point-chasers, people who seek critically approved wines for the luxury and status they convey rather than for excitement in a glass.

2009 Bordeaux pricing says we are not in recession.

ttp://abcnews.go.com/Travel/wireStory?id=11040466

NEW YORK (Reuters Life!) - As the prices trickled out for the first tranche of the 2009 Bordeaux vintage being sold en primeurs, there was shock and awe.

They had doubled and, in some cases, tripled what had been asked for the vintages of 2007 and 2008. They were higher, in fact, than the great vintage of 2005. It was enough to make grown men weep.

Of course the speculators swept in (these are the folks who buy now, regardless of price, with the expectation they will someday sell the stars of the vintage at auction for a handsome profit) while ordinary wine collectors (these are the folks who buy Bordeaux to slowly age it in their cellars with the expectation they will someday drink something positively exquisite) were left to pound sand and ponder the high cost of a passion for the grape.

Some good selections are mentioned above.

Go to "Crush" on East 57th Street. My friend Drew Nieporent owns it and has staffed it with helpful and friendly sales staff. Let them know how much you want to spend, and they will suggest the best bottle for your taste.

Please drink responsibly.

Article also does a fairly good job of pointing out quality alternatives that offer top drinking and better value. The idea of purchasing two years in advance wine that will not be ready to drink for perhaps ten years is difficult to swallow.

Wine indicator just gave a negative signal

Wine merchants in London report that sales of the 2010 vintage – while still in the barrel, or en primeur – are running at half the volume of last year, blaming fears of a “Bordeaux bubble” as investors push up prices to unpalatable levels.

http://www.ft.com/cms/s/2/b6511cce-9919-11e0-acd2-00144feab49a.html?ftcamp=rss#axzz1PIhoPocv

I don't know if it is as much as a "negative" signal but instead a sign of a rational pause given some Bordeaux prices have almost TRIPLED since the vaunted 2005 vintage - which saw a doubling of some prices from 2004.

Bordeaux is trying to remarket itself as a "limited" luxury, when in reality even the 1st growths make 10-20K cases each vintage. That is a TON of wine.

There is talk that Bordelais are releasing only 1/5 to 1/3 of there overall production in an attempt to keep prices up via limited supply.

The explosion of luxury prices is a clear sign that QE2 has almost entirely helped the world's economic elite consolidate even greater financial wealth.

Unfortunately, this is the reality of our economic policies and maybe one of their goals... it is disgusting.

The incremental demand for 2009 Bordeaux all came from China, and the big accounts that loaded up in 2009 can only commit that kind of money every few years. That said Bordeaux prices are crazy at least for the top names.
It still concerns me because wine like art is a pure luxury item especially when your talking hundreds of thousands of dollars a bottle. I do like what Jancis Robinson said, wine should be drank not collected..and why spend a small fortune on Bordeaux when there's something called Chinon that goes for a tiny fraction of the price.

The great surge of demand from China is not as great as producers, importers, distributors, retailers, and auction houses want you to think it is.

First, for the most part, the Chinese are drinkers of wine, not collectors. Lafite and some other 1st growths are seen as status symbols and signs of success; but other wines are drunk simply for their labels - such as Chateau Beychevelle, which is called "dragon boat wine" because it has a Viking ship on its label. Western collectors of back vintages of Lafite have been dumping them at a premium to Hong Kong middlemen that probably are selling them for an even greater fortune to their compatriots. Even Lafites second wine, Carruades de Lafite - which is really just an average wine at that - has been bid up from $50-70/bottle to $400+ in an attempt to be able to show off the "Lafite" label at some business table. Of course all of this has created a thriving counterfeit market in HK and the mainland - not that what is in the bottle actually matters to many that are drinking these wines.

The 2008 vintage may be in particular demand from China due to its "lucky" number 8. There is a good chance that the Chinese *MIGHT* have participated in the en premier futures market that year, but Chinese aren't very accustomed to the concept of paying for wine that they won't receive for 2-3 years. Extensive Chinese participation in the 2009 en premier is hard to pin down empirically with London distributors releasing numbers boasting of sales to customers that may or may not exist (or may actually include themselves pushing up numbers). *There is a ton of weird stuff that happens with producers, distributors, and auction houses... not to mention tons of questionable actions by some retailers.*

Thus the perception that the Chinese (or rich Russians) are buying up 2009 and 2010 en premier has become one of the Bordelais best marketing tools. US and British buyers participated in 2008 and some of the 2009 vintage, but the 2010 vintage's price surge has soured many traditional Western buyers - and I highly doubt that the Chinese or other foreigners are suddenly going to fill the en premier void. But it is all a game of perception... if the Bordelais decide to release even less wine - which is apparently taking place - they can claim that the 1st, 2nd and 3rd tranches have "sold out" - even claim that the Chinese were "big" buyers. The Bordelais have driven this strategy to the point where all of the sales "data" they publish is probably questionable - especially given the talk that Chateaus themselves have been bidding up back vintages to create a sense of excitement and price momentum.

It is funny how much the Bordelais actions and the FEDs actions have had similar impacts on their respective markets. They manipulated the supply and perceived demand (read: lied) for their product and the FED manipulated investors by creating a zero interest rate environment - and buying tons of US gov't bonds among worthless trash securities - to "force" investors into pumping up speculative assets. In the short-term it works, but in the medium- to long-term it is all an illusion.

As for the wine market, the surging prices have far more to do directly with QE2 than independent demand from China. The FED has successfully helped the already ultra-rich battle it out over luxury goods while unemployment and inflation eat away at the vast majority of our economy. This is quantitative easing reality - not the Ivy League bullshit that Bernanke has been shoveling.

The only wine the rich Communist Chinese should be buying are cases of Lafite for Bernanke as a gift for creating an environment where the world's uber rich become so powerful that no market or law reform will remove them from power.

Brut force and violence seem to be looming in the future as the only "solution" to this problem of disgusting inequity and economic imbalance.

Thank you Mr. Bernanke for helping sow these seeds...

Well, Wine Prices are not surging, at least not all wines are going up equally. California prices are clearly not participating, nor is Oregon. I recently saw a bottle of Pride Merlot going for $55 the same price it would have gone for several years ago(maybe this is because Foley is no longer there but I don't see Napa increasing.
Italian wines are fairly flat too maybe up a little for some of the top Piedmont producers. What's up is Bordeaux and Burgundy. Unlike Cabernet or Pinot Noir there's only so much land that can produce a Bordeaux or Burgundy and the wine collectors are going after these markets.

As far as 8 being a lucky number, yes that's very true, but there's something more important that occured in the year 2008. Hong Kong abolished Wine Taxes.

The evidence doesn't suggest that China has suddenly become a consumption market for high end wine. The action that's been driving up prices is occurring in the futures market(primarily a Bordeaux phenomenon) and at the auction houses. Over 1/4 of Bordeaux is now going to China and Hong Kong to satisfy the demand of the New Millionaires across Asia. New millionaires that have money find themselves needing to show off this money and engage in the stuff millionaires do..collect things? And armed with a copy of Robert Parker they are now shrewd investors having paid top dollar for 2009 futures and waiting for the price rise.

Speculation is spreading even among wine lovers in Europe. Says Olivier Bernard, owner of the wine merchant company Millésima: “I think that 35% of European private sales are speculative. In reality, the cases are resold in China.

http://www.worldcrunch.com/bordeaux-bubble-chinese-thirst-top-french-labels-could-lead-worldwide-wine-speculation/3264

The sad thing is that the better Bordeauxs and Burgundys can require a decade of cellaring before they are at their best and often taste sub-par or disjointed when first bottled. Often these high end wines don't last more than 2-3 years before being consumed leaving the buyer over-paying for a sub-par wine experience.

Also with regards to Bordeaux in particular these wines are bought based on Robert Parker scores and he likes fruit bombs. So if you like your wines a little more subtle and elegant you may be disappointed for another reason..

California Grand Crux? WTF?

http://www.drvino.com/wp-content/uploads/2011/10/sea_smoke_pinot.jpg

If anyone is looking for a great deal in Burgundy.
Jadot Dominode 2007. Under $25.

Faiveley Mercurey 2008
$12.99

(Reuters) - Prices for Burgundy wine jumped by more than a fifth at the 150th annual Beaune Hospices charity auction Sunday, with growers hailing a high quality vintage and a recovery in foreign demand.

The sale of wines from the Hospices domaine, conducted by auction house Christie's, traditionally gives an indication of price trends for the latest vintage and is one of the highlights of the French wine calendar.

http://www.reuters.com/article/2010/11/21/us-france-wine-idUSTRE6AK1QE20101121
----------------
@ Memito Faively looks like a steal considering the price 85-88 Burghound , If I guessed the vineyard and color...

While I find "scoring" wine to be highly debatable (read: inflationary), if I respect any of the "scores" of the critics it would be Allen Meddows (Burghound) and John Gilman (View from the Cellar). Steven Tanzer (IWC) doesn't bother me too much either.

The fact is that for "one off", single bottle purchases of wine that you are going to drink today or in the next 3-months, there are a TON of great, friendly wines out there that "score" in the mid-80s and are relatively cheap. This is especially true if you are willing to drink the dozens, if not hundreds, of less popular varietals.

If you are going to drink the more popular varietals/producers, it helps to look for deals on less popular vintages. Americans are so focused on buying "the best" vintage, while drinking wine for me is about different experiences, not having the "best" wine. For example, 2009 Burgundy is selling for 2-3x the cost of the 2008 vintage at the Grand Cru level, yet 2008 is considered a far more traditional vintage. 2008s in my experience are still drinking well and are thought to be able to very well, if not better than the 2009s. But b/c 2009 has been hyped, they cost a lot more.

Unfortunately Burgundy is becoming the new focus of fashionable and speculative buyers and prices are going up in response. The good side is that if you avoid the Grand Cru level, a lot of 2009 1er Cru wines are still selling around their '06-'08 pricing. Village wines should remain a deal regardless of how crazy the buying of top producers becomes.

2009 Beaujolais, while Gamay not Pinot Noir, represents a great, great value, is drinking well, and should cellar for over a decade.

Cheers!

The reign of Bordeaux may be over. After 15 years of the region's investment-grade wines offering an annual return of about 15 per cent, the price of recent vintages of industry bellwether Château Lafite Rothschild fell about 17 per cent in 2011, according to brokers Fine and Rare Wines. Others experienced similar falls. But investors have not deserted wine as an asset class. Rather, they appear to believe Bordeaux is over hyped and over priced. The 2010 release was the third "vintage of the century" in the past 10 years.

http://www.commodities-now.com/commodities-now-news/general/9452-wine-bordeaux-bubble-bursts.html

Yao Ming just started his wine business, buying $2 per bottle TraderJoe-grade wines and resell them in china for $100/bottle

similar to US, there are plenty of rich fools in china.

He's not buying Trader Joe wine, but sourcing grapes and doing his own winemaking.

The money in china is chasing first growth Bordeaux. At $289, no established reputation i think this is a solid short.

Im no wine connoisseur and a passive drinker and would get really frustrated ordering french wines. One would thing price tags would promise you something good but french wines are so all over the map.
I think American wines are brilliant for the average shmuck like me that just likes something that tastes good with no care for year,label,region,or who's great great grandfather did what in whatever vineyard.
All that being said, I was recently very nicely surprised by a Pinot Grigio I had the other day. Think it was called Turning Leaf and was less than $10 bucks. Definite hint of pear.

Truthskr, if you enjoy the wine, then that's the important thing. Personally pinot grigio is not my thing and prefer Sauvignon Blanc from South Africa or Chenin Blanc from the Loire, both can be purchased from between $10-$20 and the quality is high.

Rsider, like I said Im very passive about wine, and half the time Im not paying attention to what Im drinking to know if I like Merlots vs Cabernets, Pinots from Chardonays, though I do like all Reislings and this Turning Leaf one so i guess i have a sweet tooth on wines.
The one thing I learned that I dont like in wine is the obvious factor,tannins. Something of which Ive encountered in very expensive bottles of french wine that made me realize like art, I will never completely understand what prices wine so much.

Most expensive wine Ive ever had was a '76 Lafite in the mid to late 90s. I'll admit was pretty smooth but I did taste better $40 dollar bottles.

But yes, most important is that you enjoy it.
Of course a wino on the street is quite happy with some Champipple. (For the old school Sanford and Son fans)